Causal and Abstract Systems for the Transfer of Corporeal Movable Property – The (Un-)Importance of the Distinction in Light of Other Legal Mechanisms to Protect Transferees in Good Faith

Abstract

Abstract 280The article rejects the (possible) assumption that what is important instead of the distinction between causal and abstract systems for the transfer of corporeal movable property is (only) the protection of transferees in good faith. Its analysis takes five existing abstract jurisdictions (Germany, Estonia, Greece, Scotland and South Africa) into account. It identifies and examines three legal mechanisms (other than the principle of abstraction) to shield parties in good faith from the invalidity of preceding contractual agreements, that is, firstly, bona fide acquisition, secondly, relative effects of invalidity, and thirdly, (instant) acquisitive prescription. The article demonstrates that the (practical) relevance of adhering to the principle of causality or abstraction almost exclusively depends on the rules of other areas of law (delict or tort, unjustified enrichment, compulsory enforcement and insolvency law) as well as the three legal mechanisms protecting bona fide parties analysed – hence, the distinction between causal and abstract jurisdictions is indeed of limited significance. However, the protection an abstract legal system is able to offer goes in three respects beyond safeguarding transferees in good faith: firstly, for parties in bad faith, secondly, in two-party situations, and thirdly, for third-party holders of limited/subordinate real (security) rights, which is why the (possible) assumption raised above is rejected.281